Homeowner · Minneapolis-St. Paul, MN · Member since 2009 · 23 posts · 4 votes
I'm a newbie and have recently seen many ads for websites offering "transactional funding" on gmail. Can someone explain the process? All the ads give you is a vague, though very optimistic, blurb about how their company gives you all the money you need, no credit or income verification necessary, just easy money with nothing down, like all the hucksters promise.
What kind of transactions are they talking about? Is this a legitimate tool for investors? Something newbies could use? What are the real costs?
It is real. They loan 100% of the deal for a double close. You MUST have a buyer in place before they will lend you the money. Typical fee's are 2% of the purchase plus $500. Minimum fee is usually $2500.00. My guy lends for 3 days at this rate and then anything after 3 days, its at 18% APR.
They do not check credit, there is no money down but, again, you need to have the end buyer lined up.
It is real. They loan 100% of the deal for a double close. You MUST have a buyer in place before they will lend you the money. Typical fee's are 2% of the purchase plus $500. Minimum fee is usually $2500.00. My guy lends for 3 days at this rate and then anything after 3 days, its at 18% APR.
They do not check credit, there is no money down but, again, you need to have the end buyer lined up.
Justin,
I attended webinar by Cameron Dunlap and he offers one-day transactional fund for 3% fee. But he requires $1,000 deposit (he will refund it after first transaction with him). It seems like your guy is more flexible and cheaper. Does he offer unlimited amount and POF letter on demand. I think that is what Cameron Dunlap offers.
To be honest, I'm not sure. My title company handles the transactional part for me. He's a private individual who just says give me three days notice and the money will be there. I've only done one close with him but it worked.
You can get POF letters from coastal funding. I haven't used coastal funding but I think their terms are comparable. One of the owners, or agents is a member on BP.
Justin is correct. No credit or income verification or underwriting of the property, but you do need to have the end buyer lined up for a same day closing.
Here is a page with videos that explain "flash cash" (transactional funding), and the difference between simultaneous and back-to-back closings, [LINK REMOVED]
This post is a bit old, but a question... if the end buyer is getting a loan for the purchase, using a hard money lender, how does the wholesaler justify the increase in price? Doesn't the hard money lender check for ownership and/or asking price prior to funding?
Klonji - Many hard money lenders are willing to fund because they understand that in most cases the house was originally purchased at a discount. Transactional loans are frequently provided on short sale and reo flips which are almost always below market value, and for wholesales its just a matter of finding a good deal.
I would say that most of the time the lender for your C buyer will not be Hard Money. But either way, you "justify" the value by an apprasial and you explain any rehab work you did or that you simply got a great deal on your purchase. You purchased wholesale and you sold retail.
BTW, some transactional lenders charge less that 2% with none of those extra pesky fees and minimums!
Guys -
Please respect the forum rules and stop advertising. I've already removed several posts and have edited others. This is not an advertising forum, and the OP was asking for help answering his questions; he wasn't asking for people to advertise their services to them.